007162340X.pdf by Iyer Ananth V.; Seshadri Sridhar.; Vasher Roy

Author:Iyer, Ananth V.; Seshadri, Sridhar.; Vasher, Roy.
Language: eng
Format: azw3
Published: 2009-07-20T06:04:18+00:00

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Toyota Supply Chain Management

This example illustrates that it is imperative for logistics managers to consider the impact on downstream operations when they are establishing or modifying processes.

Tracking Progress

Tracking the shipment of vehicles from the plant all the way to the dealer is crucial. Toyota has created a tracking system that receives input from the rail companies on a real-time basis that reports the progress of each railcar. It also gets input from the trucking companies when vehicles are delivered to the dealers.

Toyota uses this information internally to monitor the distribution progress throughout the logistics network. It also provides an estimated time of arrival (ETA) to the dealers. The ETA calculation is based on the date and time of the final quality assurance (FQA). The FQA is the point in the marshaling yard process at which a vehicle is ready for shipment. The calculation is a follows: ETA ⫽ FQA ⫹ estimated delivery elapse time

The estimated delivery elapse time is based on the recent actual history for each route.

If a vehicle has not been produced, the ETA is still calculated; the FQA date must also be estimated. Because many variables can impact the actual transportation time, Toyota provides the dealers with an estimated three- to five-day arrival window instead of an exact date. That arrival window is updated as the vehicles get closer to delivery. The ETA information is used by the dealer to provide its customers with expected delivery time.

Distribution Flow in Europe

Toyota’s distribution flow in Europe is different than its flow in North America because the dealers in Europe do not have enough space to maintain a large inventory of vehicles. In fact, many dealers operate in an urban area and have room for only a few showroom vehicles. Figure 8-5 shows the normal flow in Figure 8-5. Europe vehicle distribution flow

Logistics

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Europe. As in the North American flow, the vehicles are released from the assembly plant and shuttled to the marshaling yard. In Europe, there is no additional processing in the marshaling yard. Instead, the vehicles are shuttled directly to the staging area for shipment via truck to one of the regional hubs.

The hubs are where the installation of accessories and the application of the price label take place. Once the vehicle is sold by a dealer, the hub is notified to prepare the vehicle for shipment and install the accessories. Then the vehicle is shipped via truck to the dealer.

One of the other differences in Europe is that most transportation is via truck, not rail. Nevertheless, there is some limited use of rail for long-distance routes, and of course ferries or ships are used to cross waterways.

Another difference is the method for calculating the ETA. The ETA is based on the FQA date and time from the hub, not the marshaling yard at the factory.

Also, the ETA is a promise date, not a delivery window. The promise date reflects the latest estimated arrival date.

Toyota’s distribution processes in North America and Europe are just one example of how Toyota has the agility to adapt its processes to different environ-ments around the world.

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